As a competitive firm hires increasing amounts of labour, the value of marginal product of labour
A) decreases.
B) remains constant.
C) increases.
D) decreases then increases.

Question

Quizplus · Accepted Answer

The value of the marginal product of labor decreases due to the law of diminishing returns, which states that as more units of a variable input (like labor) are added to fixed amounts of other inputs, the additional output produced by each additional unit of the variable input will eventually decrease.

As a Competitive Firm Hires Increasing Amounts of Labour, the Value